ANC link in VBS scandal

COUNCILS’ R1.5BN INVESTMENT Limpopo municipalities claim ANC provincial HQ advised investing in bank.

Asenior ANC official in Limpopo has been accused of facilitating deals with some of the 15 municipalities that invested a total of R1.5 billion into the controversial VBS Mutual Bank, which has been forced to close by the Reserve Bank after facing a liquidation crisis.

The 15 municipalities, which are at risk of being placed under administration after the investment, are in North West, Mpumalanga, Gauteng and Limpopo.

The Citizen can reveal that the Vhembe district municipality committed R311 million, which is 34.57% of their annual operating budget, while the Greater Giyani local municipality invested R158 million, or 52.27%, of annual operating revenue.

South African Local Government Association provincial chairperson Thembi Nkadimeng said they advised municipalities not to invest in the bank as per National Treasury directives. But now some of the affected municipalities in Limpopo are accusing the provincial ANC head office of misleading them. They claimed an ANC bigwig in the provincial executive committee advised them to invest with VBS.

“We trusted this comrade because he was from the biggest office of the ANC in the province . ... But after advice from Treasury, we now know this comrade and his political camarilla were just abusing their positions as ANC leaders, using the power of their offices for selfish gains,” said one angry official on condition of anonymity, for fear of victimisation.

According to a Treasury document sent to the affected municipalities, the investments were illegal. In March, the Reserve Bank placed VBS under administration.

ANC Youth League Sefako Makgatho region chairperson Tebogo Ramothole said the league was very disturbed by their municipality’s predicament. He said an urgent meeting has been arranged at Lepelle-Nkumpi municipality to establish who advised the municipality to invest with VBS. “We want the mayor to tell the council who was responsible as the matter was not brought before council,” he said.

Yesterday ANC provincial spokesperson Khumbudzo Ntshavheni distanced Mohlala from the investment, saying neither ANC nor PEC members had been tasked with advising municipalities to invest in the bank. Party provincial treasurer Danny Msiza branded the accusations misguided. “Our support of the black-owned bank with roots in Limpopo cannot constitute an unwarranted or criminal act. This doesn’t mean we condone any wrongdoing by VBS management.”

Municipalities that invested in VBS include: Fetakgomo – R210m Lepelle Nkumpi – R151m Lim 345 – R122m Ellias Motsoaledi – R20m Ephraim-Mogale – R82m Dr JS Moroka – R10m Madibeng – R50m Dr Ruth Segomotse Mompati – R100m Merafong City – R50m West Rand District – R48m Makhado – R61m and Mahikeng – R83m